Industrial strategy

 ‘Industrial strategy’ relates to coordinating a wide range of economic policies to achieve particular objectives, which need not be purely economic.

The government published the industrial strategy White Paper, Building a Britain fit for the future, on 27 November 2017.

Useful links

• The government’s industrial strategy web pages
• White paper: Building a Britain fit for the future
• Industrial strategy press release (27 November 2017)

Key points of the industrial strategy

The first aspect of the industrial strategy is a series of policies that have an impact on all sectors of the economy: the ‘Five Foundations’:

• Ideas (R&D, innovation)
• People (skills and education)
• Infrastructure (broadband, energy, transport)
• Business environment (support for specific sectors and SMEs)
• Places (Local Industrial Strategies)

The second aspect of the strategy is a series of bespoke partnerships with individual sectors and government: the ‘sector deals’. The sector deals announced so far are:

• Aerospace
• Artificial Intelligence
• Automotive
• Construction
• Creative industries
• Life sciences
• Nuclear
• Offshore wind
• Rail
• Tourism

The third aspect of the strategy is a series of challenges facing the economy. The mission of solving these challenges will help the whole economy to strengthen and develop. The ‘Grand Challenges’ are:

• AI and the data revolution(how to embed and maximise the advantages of AI and data)
• Clean growth(low carbon technologies across the economy)
• Mobility(low carbon transport, automation, infrastructure)
• Aging society(healthcare and labour market challenges)

The Government has created an independent Industrial Strategy Council chaired by Andy Haldane, deputy guvnor of the Bank of England to assess progress and make recommendations to the government.

Key policies

Ideas

• R&D investment raised to 2.4% of GDP by 2027 (including £12.5 billion more public R&D investment by 2021/22)
• R&D tax credit increased from 11% to 12% in January 2018
• £725 million over four years invested in Wave 2 of the Industrial Strategy Challenge Fund. This competitive funding programme will address themes related to the Grand Challenges.

People

• New technical education system as recommended in the Skills Plan, including ‘T Levels’ (emphasising technical skills) and apprenticeships
• Invest £400 million in maths, digital and technical education
• Create a National Retraining Scheme by the end of the Parliament, including £64 million investment for digital and construction retraining 
• Increase ethnic minority employment and employment of disabled people. Support carers into work.

Infrastructure

• National Productivity Investment Fund increased to £31 billion by 2022/23 to develop transport, housing and digital (of which £24 billion already allocated)
• Electric vehicle infrastructure (such as charging points and car grants) investment increased by £100 million
• Digital infrastructure investment in 5G, rural broadband and data accessibility.

Business environment

• Sector deals to help sectors overcome problems specific to their industry
• Fund more high potential businesses though the British Business Bank, including through the Investment Fund
• Increase productivity in SMEs by analysing the reasons for variable rates of productivity.

 Places

• Local Industrial Strategies to deliver economic growth across the UK, helping to develop high growth clusters where appropriate
• Transforming Cities Fund to develop transport links between cities
• Pilot a Teacher Development Premium that will help develop high-quality teachers in areas with lower performing schools.